FISCAL CLIFF: LIVIN’ ON A PRAYER – Jake Sherman and John Bresnahan take us behind the scenes of last night’s GOP meltdown: “Things were so bad for Speaker John Boehner Thursday night, support for his Plan B tax bill so diminished, the limits of his power with his own party laid bare, that he stood in front of the House Republican Conference and recited the Serenity Prayer. ‘God grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.’ Boehner nearly cried. The Ohio Republican accepted that he couldn’t change the minds of his House Republican Conference. He tried to convince them that, facing tough negotiations with President Barack Obama over the fiscal cliff, he needed them on his side — and he fell short. With that, Boehner — a man who has clawed back from the political ledge to arrive at the top rung of power — saw perhaps the lowest moment in his speakership.

Story Continued Below

-- “It was supposed to be a moment of strength, a way to drag Obama and the Democrats toward them in the high-stakes fiscal cliff negotiations that have Washington teetering on the brink. Instead, it showed the world that either Boehner couldn’t bring 217 of his own members to his side, or they were unwilling to be led by him in this fight. Rep. Mike Kelly, a burly freshman from Pennsylvania, stood in front of a closed meeting in the basement of the Capitol and said his fellow Republicans were selfish. Boehner, he said, has done a good job. It was too late. The meeting had adjourned. No heartfelt rhetoric from Boehner. He and Majority Leader Eric Cantor (R-Va.) simply read statements later delivered to the press, and went their respective ways. It’s unclear when the House will return. GOP aides said it could even be 2013, after big tax increases and spending cuts kick in, although they have been warned to be on 48-hour notice to return to Washington if necessary. …

-- “Now, Republicans will see why Boehner was willing to offer Obama so much: The final deal Republicans will now have to swallow will be driven by Senate Majority Leader Harry Reid (D-Nev.) and Obama. ‘He’s tried his best,’ said Rep. Steve LaTourette (R-Ohio), a longtime Boehner confidant who is leaving Congress at the end of the year. ‘But sometimes your best isn’t good enough in the face of some people that just don’t want to find common ground.’” http://politi.co/R8bL5b

STOCK MARKETS RATTLED – “The dramatic course change, and the uncertainty about what will become of Washington's budget negotiations, could rattle investors and financial markets that until now have been reasonably stable on the expectation that the White House and congressional leaders would strike a deal,” Janet Hook, Naftali Bendavid and Carol Lee write for the Wall Street Journal. “In early trading, Asian markets slipped and U.S. stock futures were down 200 points. A selloff in the U.S. Friday would revive memories of September 2008, when the Republican House voted down the Bush Administration's first Wall Street bailout plan, sparking a 778-point fall in the Dow Jones Industrial Average.” http://on.wsj.com/TcrRcq

A WEEK ON THE BRINK – WaPo’s Paul Kane, Ed O’Keefe and Lori Montgomery explain how we got here: “It began last week when President Obama delivered a stern message to the House speaker: If there was going to be a deal to tame the nation’s debt, it had to happen now. If they went over the “fiscal cliff,” it would only become harder to reach a deal, Obama said. The next day, Friday, Boehner (R-Ohio) phoned Obama offering what seemed like a major breakthrough: Republicans would agree to raise tax rates for the first time in decades if the president gave a key concession on entitlement reform. That offer set in motion seven days of dealmaking, posturing and cajoling by Boehner and other House leaders, first on a grand deal with the White House and then on a Plan B with their own House caucus. By Thursday night, both deals had fallen apart, and Boehner was near tears in announcing the failure to his colleagues, Republicans said.

-- “The failure of a grand bargain was the latest oh-so-close moment for Obama and Boehner, who have been dancing around a deal to cut the deficit for the better part of the past two years. And the collapse of Plan B set a new low in Boehner’s sometimes rocky relationship with a House Republican caucus that has long been uneasy about the speaker’s dealmaking with Obama. Following the latest breakdown in negotiations, Democrats said Boehner should return to the bargaining table with Obama — or just let House Democrats and 25 or so Republicans vote for a Senate-approved plan to extend tax cuts for the middle class. But Republicans said the well has been so poisoned that restarting bipartisan talks would be more difficult than ever.” http://wapo.st/Vf87CO

-- POLITICO’s Darren Samuelsohn answers five questions that are sure to come up as the threat of sequestration nears: Who’s in charge? How specific will OMB and the agencies be? Layoffs or furloughs? Can Congress undo sequestration? What are the legal consequences? http://politi.co/UVakW3

GOOD FRIDAY MORNING, DECEMBER 21, 2012, and welcome to the Huddle, your play-by-play preview of the day’s congressional news. Huddle will be back the day after Christmas, with my talented colleague Kate Nocera filling in for the week. Have a safe and happy holiday!

My new followers include but are not limited to @dibari3 and @jaykay3.

TODAY IN CONGRESS – The House meets in a pro forma session but members have gone home. The Senate meets at 1 p.m. and will vote on the House-passed defense authorization conference report at 2 p.m. After that, the Senate will hold a cloture vote on a Hurricane Sandy aid bill.

AROUND THE HILL – House Speaker John Boehner holds a news conference at 10 a.m. in HVC Studio A. Sens. John McCain, Kelly Ayotte and Lindsey Graham speak on Benghazi in the Senate Studio. House Minority Leader Nancy Pelosi and other Democrats speak to reporters at 1 p.m. in HVC Studio A.

McCONNELL POLLS ASHLEY JUDD’S POLITICS – Manu Raju reports for the hometown paper: “Senate Minority Leader Mitch McConnell is already playing hardball with Ashley Judd. The actress and prospective 2014 challenger to McConnell has scarcely dipped her toes in the senatorial waters, but she’s about to get a bitter taste of what a bid against the wily GOP leader would be like. McConnell’s campaign has singled out a series of the actress’s statements and positions it’s prepared to use against her should she decide to run against the Republican. Judd wouldn’t make it through the starting gate, the GOP leader’s political team believes, once her views on coal, abortion and Obamacare are known to voters in solidly red Kentucky. In fact, McConnell’s campaign has polled some of Judd’s comments and found that the nearly 28-year Senate veteran’s prospective lead in a head-to-head match-up increases from just 4 percentage points to 20 points once voters understand her political profile, according to a memo provided to POLITICO. The poll found voters like Judd much less when they learn that she lives in Tennessee and Scotland, her grandmother referred to her as a ‘Hollywood liberal’ and she has suggested it is wrong to breed given widespread poverty in regions around the world. …

-- “The fact that McConnell’s team is testing Judd’s viability shows how seriously the GOP leader is taking any possible threat to his reelection to a sixth term. And that includes a Hollywood celebrity and liberal activist with no experience running for political office.” http://politi.co/UbT6Fb

BOOKER COULD FACE CROWDED SENATE PRIMARY – Jeremy Herb reports for The Hill: “Newark Mayor Cory Booker’s announcement Thursday that he will explore a run for Senate in 2014 complicates the political landscape for New Jersey House Democrats who are also eyeing the seat. Booker’s move will surely shake up the Democratic campaign for the New Jersey Senate seat in 2014, as he’s a charismatic young star in the party who was a surrogate for President Obama’s reelection. But the mayor’s decision to dive into the Senate race, rather than challenge Gov. Chris Christie (R) in 2013, is not expected to clear a Democratic Senate primary field that could grow quite crowded, whether or not Sen. Frank Lautenberg (D-N.J.) decides to run for reelection.

- - “Rep. Frank Pallone Jr. (D-N.J.) has long been interested in running for the Senate … Rep. Bill Pascrell (D-N.J.) told The Hill on Thursday that he is not ruling out a run, either. Lautenberg, the oldest member of the Senate — he’ll turn 89 in January — has not made his plans for 2014 clear. His spokesman, Caley Gray, said in a statement that Lautenberg was focused on his work in the Senate on the Hurricane Sandy relief bill and what he called America’s broken gun laws.” http://bit.ly/TbMruS

ETHICS PANEL: BERKLEY BROKE RULES – Karoun Demirjian writes for the Las Vegas Sun – “The House Ethics Committee has found that Rep. Shelley Berkley ‘violated House Rules and other laws, rules and standards of conduct’ in a mixed decision. The Ethics Committee said Berkley was guilty of ‘improperly using her official position for beneficial interest by permitting her office to take official action specifically on behalf of her husband’s practice.’ But they also ruled that Berkley had not violated house rules ‘by dispensing special favors or privileges’ to her husband. Nor did she violate ethics rules by working to preserve the kidney transplant center at University Medical Center, the committee found. The decision was unanimous.” http://bit.ly/YtoeUx

KERRY: GREATER ROLE FOR MILITARY IN DIPLOMATIC SECURITY – Eric Schmitt and Michael R. Gordon write for the NYT: “Senator John Kerry said Thursday that the United States needed to re-examine how the military might play a greater role in protecting diplomats in dangerous regions in the wake of the attack on the mission in Benghazi, Libya, on Sept. 11 that led to the death of four Americans. Mr. Kerry, a Massachusetts Democrat who is the chairman of the Foreign Relations Committee, is the leading candidate to succeed Hillary Rodham Clinton as secretary of state, so his comments during a hearing into the handling of diplomatic security in Benghazi before the deadly assault there carry particular significance. Two deputy secretaries of state, William J. Burns and Thomas R. Nides, told the committee that the department had already started to fix the ‘serious, systemic problems’ identified in a scathing report issued this week by an independent panel. The measures include sending about 225 more Marine security guards to embassies and consulates around the world. Mr. Kerry said the military’s role needed particular scrutiny after the Benghazi attacks.” http://nyti.ms/R8KuQe

OBAMA AND BIDEN WILL SPEAK AT SEN. DAN INOUYE’S FUNERAL at 10:30 a.m. today at National Cathedral, the White House said. Harry Reid and other senators are expected to fly out to Honolulu on Saturday for a final service and burial the following day.

BIDEN, OTHERS HONOR INOUYE IN ROTUNDA – Scott Wong writes: “Hawaii Sen. Daniel Inouye joined a rarefied group of Americans on Thursday, becoming just the 32nd person in the country’s history to be given the honor upon their death of lying in the Capitol Rotunda. Vice President Joe Biden, Cabinet members, lawmakers and dozens of tearful staffers bid a final ‘Aloha’ to Inouye during a solemn ceremony in the stately Rotunda. It was the same space where a freshman senator from Hawaii stood under the dome nearly 50 years ago and listened to the ‘shuffling of feet’ as people quietly paid their respects to a fallen president, John F. Kennedy. … Powerful politicians and anonymous staffers came out to pay their respects to Hawaii’s patriarch. There was Defense Secretary Leon Panetta and former Transportation Secretary Norm Mineta, who was sent to Japanese internment camps at the same time Inouye was enlisting in the U.S. Army during the Second World War. … And House Speaker John Boehner (R-Ohio) was flanked by Biden and Senate Majority Leader Harry Reid (D-Nev.), a momentary show of bipartisanship amid the gridlocked fiscal cliff talks.

-- “Inouye’s flag-draped coffin, resting on the same catafalque where Abraham Lincoln’s body was lain after his death, will remain in the Rotunda for public viewing through 8 p.m. Thursday, making him the first Asian American to receive that honor. Others include Presidents Lyndon B. Johnson, Ronald Reagan and Gerald Ford, House Speaker Henry Clay, and civil rights icon Rosa Parks. ‘It’s fitting that he should lie in state beneath the enduring symbol of our democracy, the dome of the Capitol. …’ Reid said. ‘Dan Inouye was an institution and deserves to spend at least another day in this beautiful building in which he dedicated his life.’” http://politi.co/RGzF9x

DOLE BIDS FAREWELL TO AN OLD FRIEND – Ed O’Keefe writes for the Washington Post: Former Senate Majority Leader Robert Dole (R-Kan.) …. and his wife, former Sen. Elizabeth Dole (R-N.C.), arrived at the Capitol around 3:30 p.m. and were escorted to the Rotunda by Senate Majority Leader Harry M. Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.). Though Dole usually moves with the assistance of a wheelchair, he opted to walk, with the assistance of Elizabeth Dole, from the Rotunda entrance to Inouye’s casket. He walked up to the casket, briefly touched it and then saluted Inouye with his left hand. Dole’s right hand was injured during World War II. Dole and Inouye first met while recovering from wounds during World War II. They met at Percy Jones Army Hospital in Michigan, where they also met future Sen. Philip A. Hart (D-Mich.). While seeking treatment, Dole shared with Inouye his plans to one day run for Congress. As mourners recalled earlier Thursday, Inouye was elected to Congress shortly before Dole, and often joked that he ‘followed the Dole Plan’ by running for office and still managed to beat the former Kansas senator to Capitol Hill.” http://wapo.st/12tDZuw

WHO WILL MAKE HISTORY? HIRONO OR HANABUSA? – Scott Wong reports for POLITICO: “Rep. Mazie Hirono’s history-making arrival in the Senate next month — as Hawaii’s first female senator, and the hallowed chamber’s first Asian-American woman and Buddhist — is no longer a given. The death this week of beloved Sen. Daniel Inouye has created the possibility of a quick, lame-duck appointment and swearing-in of fellow Democratic Rep. Colleen Hanabusa, a one-time political rival who also happens to be female, Japanese American and a practicing Buddhist. Translation: Hanabusa could skip ahead of Hirono in the history books. Hanabusa immediately became the frontrunner for Inouye’s seat after the legendary Hawaii Democrat wrote Gov. Neil Abercrombie that it was his dying wish that she succeed him. And if the governor grants the request quickly and appoints her — which he has an incentive to do in order to boost the state’s seniority, and thus clout, in the Senate — Hanabusa might be sworn in before Hirono and the other elected freshmen slated to take the oath on Jan. 3.” http://politi.co/RGABuu

THE ROGERS REPORT: MIKULSKI GETS THE CALL – “With its late Chairman Daniel Inouye lying in state in the Rotunda Thursday, these are not happy times for the proud Senate Appropriations Committee,” writes David Rogers. “White House budget talks have eclipsed its mission, earmarks are verboten, not one of its annual bills has passed this year, and a $60.4 billion emergency disaster aid package for Hurricane Sandy risks the same fate this week. In a matter of hours Wednesday, not one but two senior Democrats turned down the chance to replace Inouye in a post that was once among the most coveted in Congress. But when the call came, Sen. Barbara Mikulski grabbed the brass ring with no hesitation, and this sawed-off shotgun from Baltimore may be just what the doctor ordered. ‘She seemed seven feet tall,’ said one who watched her get the news. And on the floor that afternoon, the incoming chairwoman gave no quarter when Sen. Tom Coburn (R-Okla.) challenged money she had added to the Sandy bill to help distressed fisheries designated as disasters by the Commerce Department. The senator from Oklahoma ‘has said on many occasions that he has been the defendant of the taxpayer. Well, so am I,’ Mikulski said. ‘Let’s get rid of this phony-baloney nonsense that somehow or another that would undermine this bill.’

-- “‘Visibility, vitality and vision, you heard it from me,’ she laughed in a brief hallway interview Thursday. ‘This committee is constitutionally mandated,’ Mikulski told POLITICO, and she wants to see Appropriations restored as one of the ‘big three economic committees’ in the Senate alongside Finance and Budget. ‘To use an Orioles analogy,’ she said, ‘I’ve been in the dugout for a long time, but I’m now ready to go the full nine innings.’” http://politi.co/TbBk3X

ROB COLLINS TAPPED FOR NRSC JOB – POLITICO’s Ken Vogel scoops: “The National Republican Senatorial Committee — struggling to regain its footing after a disappointing 2012 — has tapped veteran GOP operative Rob Collins to be its executive director, sources tell POLITICO. New NRSC Chairman Sen. Jerry Moran (R-Kan.) selected Collins over two other finalists after a several-weeks-long evaluation process, the sources said. Neither Collins, nor the NRSC nor Moran’s office would comment on the move, which is expected to be formally announced Friday. The post had been left vacant when Rob Jesmer left it this month for a consulting firm. Collins’s résumé seems uniquely suited to the challenges confronting the NRSC, which lost a handful of races that appeared winnable, finished the election with $8.5 million in debt and is facing intra-party tensions and competition from outside groups that are unburdened by contribution limits. Collins is on leave from a job at the bipartisan consulting firm Purple Strategies, which he had joined after helping launch and run American Action Network, one of the big-money nonprofit groups that boosted Republicans to historic gains in the 2010 midterm elections.” http://politi.co/USpaeW

SANFORD TO RUN FOR CONGRESS – Peter Hamby reports for CNN: “Former South Carolina Gov. Mark Sanford is launching a political comeback that may begin within days. Sanford is planning to run for the Congressional seat he held almost a decade ago, a Republican source familiar with his thinking told CNN late Thursday. … Sanford intends to seek the Republican nomination in South Carolina’s 1st Congressional District, a seat being vacated by Rep. Tim Scott, who was appointed to the United States Senate earlier this week by Gov. Nikki Haley. … Sanford, who resides in the Charleston area, represented the coastal district from 1995 to 2001 and had a conservative, almost libertarian voting record, often taking lonely stands on the House floor alongside Rep. Ron Paul of Texas. After his three terms in the House, he ran successfully for governor twice and was eyeing a 2012 presidential bid before he notoriously embarked on an extramarital affair that derailed his national ambitions. He is now engaged to his Argentine fiancee.” http://bit.ly/Ytpc34

WaPo PRAISES LIEBERMAN, LUGAR —From the paper’s lead editorial this morning titled, “Two who made a difference”: MORE than 80 members of Congress, including a dozen senators, are leaving office at the end of this term. Many have served the country well. But two stand out for their commitment to American leadership in the world and to bipartisan cooperation at home: Republican Sen. Richard G. Lugar of Indiana and Democrat-turned-independent Sen. Joseph I. Lieberman of Connecticut. … Both men realized some of their greatest accomplishments by partnering with senators from the opposing party. Mr. Lugar joined with former senator Sam Nunn (D-Ga.) to create the Cooperative Threat Reduction Program in 1992, which funded the elimination of more than 7,500 nuclear warheads, plus hundred of intercontinental missiles, bombers and submarines, from Russia and other parts of the former Soviet Union. Mr. Lieberman joined with Sen. John McCain (R-Ariz.) to press for U.S. intervention in the Balkans in the 1990s; later, the two and Sen. Lindsey O. Graham (R-S.C.) provided crucial support for President Bush’s ‘surge’ strategy in Iraq.

-- “Both senators were known for valuing principle over party loyalty. In 1998, Mr. Lieberman delivered a searing indictment on the Senate floor of President Bill Clinton for his misconduct with Monica Lewinsky, while opposing his removal from office. He was devoted to increasing educational opportunity for poor children, especially in the District. Mr. Lugar supported treaties reducing nuclear and chemical weapons despite their unpopularity among many Republicans.” http://wapo.st/XTXCqB

TODAY’S TRIVIA: Huddle trivia is taking a short vacation through the end of the year. But please send your trivia question submissions to swong@politico.com.

GET HUDDLE emailed to your Blackberry, iPhone or other mobile device each morning. Just enter your email address where it says “Sign Up.” http://www.politico.com/huddle/

** WANT MORE NEWS? For breaking news and customized alerts on defense, energy, financial services, health care, tax , technology and transportation throughout the day, you should GO PRO. With sector-specific coverage, early-bird editions of POLITICO's must-read morning newsletters, customized instant alerts sent to your mobile device and special subscriber-only events, you won’t miss a beat. See what you've been missing: www.politicopro.com **

** A message from the Stop The HIT Coalition: The Health Insurance Tax (HIT) drives up health care costs for small businesses, seniors, state Medicaid programs and middle-income Americans. The HIT is estimated to cost hardworking American families an additional $5,000 over a decade. And since the cost and consequences of the HIT increase over time, America’s small businesses and hardworking families are facing a bigger HIT every year. This translates to real jobs for businesses and real wages for families. That’s why the Stop The HIT Coalition – representing the nation’s small business owners and their employees – is working hard to repeal the HIT before it causes even more damage. Congress, please stop the HIT. Once and for all. http://bit.ly/1iE6tfW **

Authors:

About The Author

Scott Wong covers transportation for POLITICO Pro, and authors The Huddle, POLITICO’s popular morning tipsheet on Congress. He was a congressional reporter with the publication from 2010 to 2012.

He reported from Tucson, Ariz., after the deadly shooting rampage that severely injured Rep. Gabby Giffords and helped break a story about Missouri Sen. Claire McCaskill’s private plane that led to her admission she owed more than $300,000 in state property taxes.

He got his professional start in journalism covering local government for two small newspapers in his native San Francisco Bay Area. He later became a staff writer for The Arizona Republic, where he covered the Arizona statehouse and Phoenix City Hall.

After graduating from UCLA, he spent a year teaching English in a rural mountain village in Japan. He is a member of the Asian American Journalists Association, and lives with his wife and daughter in Washington.